IT IS THE BLINDNESS OF SOME CENTRAL BANKERS AND MPC MEMBERS TOWARDS FACTS OF FOOD INFLATION/INFLATION AND HOLDING TO A HIGH INTEREST REGIME DETRIMENTAL TO THE ECONOMY OF INDIA ( CONTINUATION TO THE POST ON 18-JUNE-2024 WITH SAME TITLE )

IT IS THE BLINDNESS OF SOME CENTRAL BANKERS AND MPC MEMBERS TOWARDS FACTS OF FOOD INFLATION/INFLATION AND HOLDING TO A HIGH INTEREST REGIME DETRIMENTAL TO THE ECONOMY OF INDIA

(CONTINUATION TO THE POST ON 18-JUNE-2024 WITH SAME TITLE)


Dear Readers,

On this subject I had written on June 18, I come back to say on this subject, freely as an Independent Citizen of India in the Interest of the Nation and the People of India in general.  

I was also waiting to see the formally released MPC Minutes of Meeting of RBI, June 5-7. 2024 to be released on 21-June-2024. I have gone through the MPC Minutes, formally released dated 21-June-2024 in the form of a Press Release, if you like can also read it at your convenience at the following link:

The MPC Composition is like this :
a)     3- Members who are in the Pay Roll of RBI such as:
        Shri Shaktikant Das, Former IAS, Governors of RBI, Chairman of MPC
        Dr. Michael Debabrata Patra, Dy, Governor of RBI ( in charge of Monetary
        Policy at RBI )
       Shri Rajeev Ranjan, Executive Director of RBI ( The RBI Officer - Nominee
       of Central Board of RBI )

b)     3- Members who are Externals to RBI, nominated Primarily by Govt of India, as Indian Intellectuals 
       Dr. Shashanka Bhide, Honorary Senior Advisor, National Council of
        Applied Economic Research, Delhi
       Dr. Ashima Goyal, Emeritus Professor, Indira Gandhi Institute of
       Development Research, Mumbai
       Prof. Jayanth R. Varma, Professor, Indian Institute of Management,
        Ahmedabad

The Formally Released MPC Minutes of Meeting shows the following:
The 2-Externals, Dr. Ashima Goyal and Prof. Jayanth R. Verma were in favour of a Repo-Rate Cut. 
The 3-RBI Incumbents and 1- External-Dr. Shashanka Bhide were against a Repo-Rate Cut, and insisted for keeping the Repo Rate of RBI @ 6.5% at which RBI is sitting tight since May 2023.......... this is not in the National Interest in the present situation. 

The Dynamics  of MPC under normal circumstances will happen like this:
a)    Whatever the Governor RBI's views will be, it is corollary that same ( to be followed ) will be the views of the other 2-RBI Functionaries who are primarily his subordinates  ....so the 3-RBI Origin MPC Members will be tagged to hold the same view ( will fall in same pit of views ). ..... It will be invariably and without choice the View of the Governor, goes without saying, it will be the Golden Rule. .... even if the National Interest may go for a sixer.

b)    Out of the 3-Externals, if by chance one External succumbs to the Governor's view ( that is the RBI Incumbents' view ) the matter will be finished in favour of the views of the RBI Governor/RBI Incumbents. Exactly that has happened in this MPC Meeting June 5-7, 2024. 

However, it is also clear, 2-Notable External Members(of MPC) of RBI have also dissented from holding on to the Highest Level of Interest Rate (Repo Rate) Regime on which RBI is sitting tight since May 2023 and which is absolutely not in National Interest in the Present Situation. 

A Rate Cut was Essential and is Essential in the National Interest, which has been bulldozed in favour of Staus Quo by the RBI Governor and his Colleagues in MPC by dragging 1-External Member to their side. 
 
This is being clearly visible from repeated press statements of the Governor of RBI in the Media in recent days postulating and propagating his views on Food Inflation trying to unduly tilt public opinion in favour of his/RBI view to continue with the Highest Interest Rate (Repo Rate ) Regime, which in my opinion is clearly not in the National Interest in the Present situation.

In the mean while I read the Money Control Article with views of the dissenting MPC Member Dr. Ashima Goyal, I also subscribe to what she says, you can read by the following link:

Money Control Article with Title Link Given below:  

Cut in repo rates will prevent retail interest rates rising to 'unbearable levels', says MPC’s Ashima Goyal


As I have said, it is expected that the New Government of India will be expected to moderate and tame the sticky views of the Governor RBI and his colleagues in MPC, which is going on in favour of a Sticky High Interest Rate Regime for a longer time, in the National Interest, that has to fall in line with the National Interest.

I say in total transparency, I am saying what I am saying very Boldly in the National Interest without fear and bias towards anyone, in all fairness to the people of India. 

With best regards,
Dr. Nimain Charan Biswal,
Mumbai, India 


About the Author: Dr. Nimain Charan Biswal is a B.Sc.(Agri. Science and Technology), M.B.A. and Ph.D.(Management Area ) by qualifications; and he has 38+ years of work experience in both industrial and development sectors in diversified fields of social importance. He has been educated at Orissa University of Agriculture and Technology (OUAT)-Bhubaneswar, Institute of Rural Management Anand (IRMA) and Gujarat University (with Resource Support of IIM-Ahmedabad). He is further educated at IIM-Calcutta, XLRI-Jamshedpur, Apple Computer Industries and Spar Inc., USA. He has worked for reputed National and International Organizations in Senior/Top Management Capacities at Board level as well as Managing Director and CEO. He is a management expert covering extensive areas from management in industrial sectors, management in agriculture and dairy, development management to management of public systems. He is a prominent professional of India and known Internationally as well. He lives at Mumbai in India.


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